Platinum price consolidates ahead of fresh catalyst

Platinum price is on track to record its first weekly gain after three weeks in the red, even as it enters into consolidation mode. After the recent corrective pullback that had it drop to a 5-week low, the precious metal has rebounded by over 5%.

In the immediate term, platinum price may be range-bound as investors await a fresh catalyst. However, the persistent geopolitical and economic uncertainties continue to offer steady support to the metal. At the time of writing, it was trading at $1,347.

Platinum price attractiveness secures its weekly gain

The jewelry and auto industries are the top two consumers of platinum. Notably, the metal’s steady demand in both sectors has sustained it above the previously strong resistance zone of $1,150 since early June.

For about four years, the precious metal had largely been range-bound between $900 and $1,150. This was largely due to a shift in market sentiment as the demand for EVs soared. 

However, the increasing demand for hybrid vehicles has been positive for the metal. Besides, its attractiveness as a cheaper alternative to gold has seen it surge to a level last recorded in 2014. 

Indeed, the platinum price has rallied by about 50% year-to-date as geopolitical tensions and the aggressive US tariffs continue to favor precious metals and other safe-haven assets. As gold holds steady above $3,000 an ounce, platinum’s demand for jewelry and investment is soaring.   

Meanwhile, palladium price rebounded slightly on Thursday after hitting a one-month low in the previous session. The metal appears set to record its third consecutive week of losses, having plunged by about 13% over the past two weeks. 

Unlike platinum which has diverse uses, palladium is largely used in catalytic converters of gasoline vehicles. In line with the world’s net zero carbon goal of 2050 and the ongoing transition to EVs, palladium has been experiencing a decline in its long-term demand.

Platinum price technical analysis  

Platinum price is on track to record its first weekly gain after three weeks in the green. It has been on a rebound for a week now after plunging to a 5-week low at the beginning of the month. However, it lacks enough bullish momentum to break the resistance along the 25-day EMA at $1,362.

Its RSI of 48 further supports consolidation in the immediate term. As such, the range between the short-term 25-day MA and the crucial support zone of $1,300 is worth watching in the ensuing sessions.

Even so, trading above the medium-term 50-day EMA points to the possibility of further gains. If that happens, platinum price will likely rise to the higher resistance zone of $1,390.